Despite continually dropping connectivity costs, local consumers will never have access to free broadband.
Speaking at the 2008 MyBroadband Conference yesterday, Mike Vos, senior manager of managed IP services for Telkom, said while there are many businesses around the world looking at models that can be supported by advertising revenue, local telecommunications companies would be unlikely to follow that route.
“There are models where advertising and other applications can carry the cost of broadband,” said Vos. However, he added that maintaining and deploying networks to consistently meet the demands of a growing subscriber base can be extremely costly.
Vos added that financial investments made by operators to meet these demands will need to be recovered through consumer tariffs and paid-for services. Telkom's next-generation network (NGN) is expected to cost in the region of R30 billion, an investment over five years (beginning 2006 and completed by 2011).
In contrast, the company's latest financial results placed its data revenue at R4.459 million.
Telkom says the demand for “innovative data solutions is driving the expansion of the NGN”. The company says over the last two years, the demand for data on its networks had doubled, and Telkom expects it to double again every six to 12 months for the foreseeable future.
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